Find information on bank money market accounts. Learn about bank money markets accounts and bank money market account rates. See offers from a variety of bank money market accounts. Discover how a bank money market works and how to open a bank money market account. Compare bank money market accounts, savings accounts and certificates of deposit. Get updates on bank offers for competitive money market account interest rates. View the benefits available with bank money market accounts from FDIC insured banks. Reviews of bank money market savings options. Bank money market accounts provide safety and security along with easy access to your invested money. Earn a guaranteed interest rate with a bank money market account.
 


Money Market Account Safety and Principal Protection

Money market accounts are fully insured by the FDIC and will not lose money due to the insolvency or failure of the financial institution provided the account remains within the limits of FDIC insurance coverage.  The money held in the money market account at an insured financial institution will be covered just like a checking account or savings account would be covered at the same institution. 

A money market deposit account held at a FDIC insured bank or even an account that is held at an insured credit union is covered by the deposit insurance fund up to the maximum allowable per depositor, for each account ownership category.  FDIC insurance covers all deposit accounts, including checking and savings accounts, certificates of deposit as well as money market deposit accounts.  The NCUA protects the money account holders have in a federally insured credit union up to $250,000.00, or the same as FDIC protects money in a bank account.

Many bank customers that question the insurance coverage for money market deposit accounts available through a bank are confusing this financial product with a money market fund or money market mutual fund, as these funds are also frequently referred to as.  Money market funds are offered by brokers and other investment services providers and are not FDIC insured or insured by the credit union equivalent insurance program, the NCUA. 

The money market account principal funds or account balance is protected by the FDIC or NCUA insurance, as is the accrued interest in the account up to the applicable insurance limits.  It is possible for a customer to have their balance eroded by account fees which is not related to insurance due to bank failure, insolvency or investment performance. 

For those high net worth bank customers, any money market account funds held in a bank, along with other insured accounts, that are in excess of the insurance limits would not be insured if the bank fails.

Additional resources to help consumers find the best money market rates are available at SelectCDrates.com under the rate table, money market account rates.

How Do Interest Rate Changes Affect Money Market Accounts

A bank money market account is a type of savings account that gives the account holder limited access to their funds while earning a competitive interest rate on the balance held in the account.
Money market account interest rates are variable, which means the interest rate paid on these bank accounts can change frequently. Interest rate changes will have a direct affect on the rate of return provided by money market account holder.

The calculation for the interest earned on a variable interest rate bank account is similar to interest calculation for fixed rate accounts. The key difference with the variable rate account as compared to fixed rate options is that the account holder can calculate the interest that will be earned for only the period that the interest remains in effect. Unless the bank guarantees the interest rate for a select period of time, which may be found with promotional money market account offers, the interest rates on a bank money market account can change at any time at the bank’s discretion.

Any changes that a bank makes to the interest rates will be immediately reflected in the yield on the money market account. When interest rates go up, money market yields increase and the account holder is rewarded for having a variable rate account however, when interest rates goes down the account holder is going to receive a lower rate of return.

When interest rates rise and fall, the account holders can earn more or less in money market accounts immediately. How fast the change occurs will depend on the individual bank. Because money market accounts are bank products that are covered by FDIC insurance, they are considered risk free investments. These accounts are attractive to savers and investors because investors can earn a competitive rate of return with little risk.

The interest rates offered on money market accounts and their rate of change are affected by a number of factors. The biggest factors impacting changing money market account rates are the general level of bank savings rates and lending rates and actions by the Federal Reserve that influence short term interest rates.

The general level of bank savings rates change based on market interest rates for comparable interest bearing products such as Treasury rates, competition among banks in the region in which the bank is based and the returns the bank is earning on depositors funds which are by and large made by the lending activity of the bank.

The actions of the Federal Reserve that include changes in the Federal Funds Rate and open market transactions can lower or increase short term interest rates that will in turn impact bank rates and money market account rates. The Federal Reserve regularly takes actions to move interest rates in response to changes in the economy and inflation.

When the Federal Reserve cuts interest rates, banks will usually decrease the interest rates they pay on savings accounts, money market accounts and certificates of deposit. Consequently, consumers will earn less interest on their variable rate money market accounts. Sometimes the rate cuts made by the Federal Reserve will take a few weeks to be reflected in bank rates. Of course, the Federal Reserve can also take action to raise interest rates which will bring about an increase in bank rates and money market account rates and increase the yield account holder can receive.

Additional money market resources, including the top ten money market account rates and top savings account rates can be found at Savings Account Rates or Money Market Account Rates. To see information on the best online banks refer to Best Online Bank or the best online savings accounts available see Best Online Savings Account.

Advantages and Disadvantages of a Money Market Accounts

Money market accounts are savings tools offered by banks that are used to save money as well as provide liquidity. Money market accounts often offer higher interests than interest bearing checking accounts yet offer the account holder the ability easy access to their invested funds.

Money market accounts are often used as an alternative to using just a checking account for transactions and a savings account to earn a higher interest rate. These bank accounts are not designed for everyone. There are both advantages and disadvantages to money market accounts.

The main advantage of the money market account is that they combine the features of a standard checking account and a savings account. These accounts usually carry no fees for checking facilities while providing a competitive interest rate.

A money market account or money market deposit account is a standard bank product and is therefore covered by FDIC insurance at FDIC insured financial institutions. The FDIC insures money market deposit accounts up to $250,000.00.

Money market deposit accounts are fairly liquid accounts, meaning the money can be accessed easily. Even though money market accounts offer some of the highest yields available with bank savings account options, money market account have high liquidity and they do not carry penalties for withdrawals before maturity.

Bank money market account generally allows account holders to have easy access to your money through checks, transfers, and even ATMs. Check writing privileges are one of the significant advantages found in these savings accounts. However, banks will restrict the number of withdrawals that can be made per month. Money market account transactions made via check or electronic transfer is generally limited to no more than six transactions per month.

A number of banks offer money market deposit account rates on a tiered scale. With a tiered interest rate scale, the more money that the account holder deposits in the account the higher the rate of interest that is paid. A disadvantage with the interest rate paid on these accounts is unlike a bank certificate of deposit which has a fixed interest rate; money market accounts have a variable interest rate. The variable interest rate means that the interest arte can be changed at anytime at the banks’ discretion.

Money market accounts can be a very good tool to help build savings funds or as an emergency fund. In addition, these accounts are ideal choice for parking money prior to making major expenditures whether these expenditures are occur only occasionally or are on a monthly basis.

The key to these bank accounts is that they offer higher interest rates with the ability to access the funds for payment transactions or to move to another investment or savings account when better opportunities arise.

Most banks provide high interest money market accounts. Always compare money market account rates and other bank savings rates thoroughly before committing to any one financial institution. Even in a low interest rate environment, the difference in interest rates between the best banks and the competition can be considerable.

Additional money market resources, including the top ten money market account rates and top savings account rates can be found at Savings Account Rates or Money Market Account Rates. To see information on the best online banks refer to Best Online Bank or the best online savings accounts available see Best Online Savings Account.

Bank Money Market Account Rules

Bank money market accounts can be an appealing savings tool for many consumers. Money market accounts have rules and features that give the accounts high yields with liquidity making these accounts first rate savings vehicles for a wide range of investors and savers.

The appealing characteristics of money market accounts are predominantly found with three key features of these bank accounts. One key benefit is that these accounts often pay out higher interest rates than may be available on standard savings account. Bank money market accounts also offer account holders the ability to access the funds held on deposit relatively easily through checks, in person transactions and with online banking. Money market accounts also offer the safety and protection of FDIC insurance.

The interest rates on bank money market accounts are established by individual banks and mostly influenced by market conditions. Some banks offer very high rates of interest that may compare with long term bank CDs. The liquidity of these accounts or accessibility of the deposited funds is established by the Federal Reserve. The safety and security of these accounts is an inherent feature of bank FDIC coverage. FDIC offers insurance coverage for investments in money market accounts up to the amount of $250,000.00 per account holder in case the bank in which the account is held is deemed insolvent and fails.

Federal Reserve Regulation D establishes the guidelines for the liquidity or account access account holders can have with these accounts. Regulation D restricts the types and number of transfers and withdrawals that may be made from savings deposits including money market accounts. As far as Federal Reserve regulations go, a savings account and a money market account are similar products covered by the same rules.

Regulation D limits the withdrawals from money market accounts to six times every statement period. Withdrawal limits include all modes of withdrawals including in person transactions, via check, online etc. A distinct difference between a savings account and money market account with a bank is the savings account may offer similar withdrawal terms with the exception of not having checking writing ability, this feature is reserved for bank money market accounts.

Additional rules regarding the minimum balance to be kept in a money market account or minimum opening deposit requirements are set by the individual bank or financial institutions.

Money market mutual funds and money market accounts are distinctly different investment or savings products. Brokerage money market accounts or money market mutual funds are not FDIC insured and not bank products.

For more information on the top ten money market account rates or top savings account rates please see Savings Account Rates or Money Market Account Rates. To see information on the best online banks refer to Best Online Bank and to see some of the best online savings accounts available see Best Online Savings Account. Current Bank promotions and deals can be found at Bank Deals.

What is a Money Market Account

Banks offer a number of traditional types of accounts including checking accounts, savings accounts, certificates of deposit, IRA retirement accounts and money market accounts. The average bank customer may be familiar with most of these accounts but many stop to ask, what is a money market account?

A money market account is a type of savings account offered by banks. Unlike a traditional savings account, bank money market accounts allow the account holder to write a limited number of checks per statement cycle, creating relatively easy access to the funds held in the account. Since the money market accounts is classified as a savings deposit account, account holders are limited on the number of withdrawals that can be made as established by the Federal Reserve’s Regulation D.

The Federal Reserve Board’s Regulation D defines the types and number of transactions that can be performed on savings accounts or non-transaction accounts. Bank accounts impacted by regulation D include money market accounts, regular savings accounts, certificates of deposit and Club Accounts.

Specifically, the term “savings deposit” includes a deposit or a bank account that meets the requirements of Regulation 204.2(d)(1) and from which, under the terms of the deposit contract or by practice of the bank, the depositor is permitted or authorized to make up to six transfers or withdrawals per month or statement cycle of at least four weeks. The bank may authorize up to three of these six transfers to be made by check, draft, debit card, or similar order drawn by the depositor and payable to third parties. If more than six transfers (or more than three third party transfers by check, etc.) are permitted or authorized per month or statement cycle, the depository institution may not classify the account as a savings deposit.

The law sets a maximum of six pre-authorized plus third-party payments per month from a money market account, it does not limit the number of in person customer withdrawals or transfers from the account.

Money market accounts are similar to both traditional savings accounts and checking accounts. The accounts generally earn higher interest rates similar to savings accounts but provide better liquidity like that of a checking account by allowing the account holder to write a limited number of checks per month.

Before opening a new money market account, prospective account holders should research a number of bank money market account rates to find one that offers the best terms and interest rates to match their needs. Once the best money market account is secured, the account can be opened quickly and easily either in person at the bank or via phone or through the Internet depending on the bank. Similar to other bank accounts, new money market account holders will need to provide the bank with some basic information that includes identification and a means to fund the new account.

For more information on the top ten money market account rates or top savings account rates please see Savings Account Rates or Money Market Account Rates. To see information on the best online banks refer to Best Online Bank and to see some of the best online savings accounts available see Best Online Savings Account. Current Bank promotions and deals can be found at Bank Deals.